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is zero. FMC has thus failed to meet its evidentiary
burden of adducing specific facts to evidence
cognizable injury or damage to its shareholders or
itself assertable against Goldman Sachs. [Id.]
The court then concluded:
A careful consideration of the full record before
the Court in the light most favorable to FMC plainly
shows that: FMC failed to adduce admissible evidence
of specific facts showing that * * * the price paid by
FMC to its own shareholders for the restructure was
anything other than a fair price established by the
open market; [Id.]
The court reasoned:
An understanding of the essential economic nature
of FMC's recapitalization transaction is crucial to the
proper resolution of the issues before the Court. In
essence, the transaction was intended to increase the
proportion of FMC's equity held by management and to
correspondingly decrease that proportion held by public
shareholders. This would be achieved by returning to
public shareholders, through cash payments, a fraction
of their equity investment in FMC while leaving intact
and unchanged management's equity investment, the
result being, of course, that management would end up
with a larger proportionate share of the reduced total
equity investment in FMC.
The transaction would be fair to all parties if
and only if the public shareholders received in cash
the fair value of the equity they were asked to give up
measured by open market values. If they received more
than the fair value of the equity given up, they would
benefit at the cost of management. If they received
less than the fair value of the equity given up, they
would be disadvantaged to the benefit of management.
FMC's claim suggests that it was harmed because its
shareholders received too much--a remarkable
proposition that was twice soundly rejected by the
District Court in Chicago prior to the transfer to this
Court. As Judge Williams pointed out, "the transaction
essentially is an instance of self-dealing" between
management and public shareholders. FMC Corp. v.
Boesky, 673 F. Supp. 242, 250 (N.D. Ill. 1987).
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